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Resolution No. 94261 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 2.2 23 24 25 26 27 28 RESOLUTION NO. 9426 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF VERNON APPROVING AND AUTHORIZING THE EXECUTION OF A PURCHASE AGREEMENT FOR IMPORTED WATER TO BE PROVIDED BY CENTRAL BASIN MUNICIPAL WATER DISTRICT BY AND BETWEEN THE CITY OF VERNON AND CENTRAL BASIN MUNICIPAL WATER DISTRICT WHEREAS, the City of Vernon (the "City") is located within the Central Basin Municipal Water District ("Central Basin"); and WHEREAS, Central Basin is a member agency of the Metropolitan Water District ("MWD") and provides water service to the City through the MWD; and WHEREAS, on October 23, 2002, the City Council of the City of Vernon adopted Resolution No. 8095 approving a five-year agreement with Central Basin to purchase Tier I surface water to supplement the --ity's water supply in order to meet short and long term water demand Iconditions and said agreement will expire on January 1, 2008; and WHEREAS, Central Basin is in the process of,seeking new lagreements with local water purveyors to cover allocations for the (next five years; and WHEREAS, the Director of Community Services & Water has recommended that a 2008-2012 purchase agreement be entered into with Central Basin to provide the City with imported water. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL JOF THE CITY OF VERNON AS FOLLOWS: SECTION 1: The City Council of the City of Vernon hereby finds and determines that the recitals contained hereinabove are true and correct. 1 2 3 4 5 6' 7' 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 SECTION 2: The City Council of the City of Vernon hereby approves the Purchase Agreement for Imported Water to be Provided by Central Basin Municipal Water District, in substantially the same form as the copy which is attached hereto as Exhibit A and incorporated by reference. SECTION 3: The City Council of the City of Vernon hereby authorizes the Mayor or Mayor Pro-Tem to execute said Agreement for, and on behalf of, the City of Vernon and the City Clerk is hereby authorized to attest thereto. SECTION 4: The City Council of the City of Vernon hereby authorizes the City Administrator, or his designee, to make whatever nonsubstantive, administrative and/or text changes, upon advice of counsel, to the Agreement. SECTION 5: The City Council of the City of Vernon hereby approves and authorizes the Director of Community Services & Water to execute the 2008 Purchase Agreement Base Allocation on behalf of the City of Vernon to implement the Agreement. SECTION 6: The City Council of the City of Vernon hereby approves and authorizes the City Administrator, or his designee., to 1perform such acts and deeds as may be necessary or convenient to effect the purposes of this Resolution and the transactions herein approved or authorized and to execute any and all documents as shall be required consistent with the terms of the Agreement herein. - 2 - 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 SECTION 7: The City Clerk of the City of Vernon shall certify to the passage of this Resolution and thereupon and thereafter the same shall be in full force and effect. APPROVED AND ADOPTED this 2nd day of October, 2007. ATTEST: NUELA GIR -, ity Clerk Name: Leoni�C. Malburg Title: Mayor - 3 - 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 STATE OF CALIFORNIA ) ) ss COUNTY OF LOS ANGELES ) I, MANUELA GIRON, City Clerk of the City of Vernon, do hereby certify that the foregoing Resolution, being Resolution No. 9426, was duly adopted by the City Council of the City of Vernon at an adjourned regular meeting of the City Council duly held on Tuesday, October 2, 2007, and thereafter was duly signed by the Mayor or Mayor Pro-Tem of the City of Vernon. � (SEAL) UELA GIkON,/ City Clerk - 4 - EXHIBIT A PURCHASE AGREEMENT FOR IMPORTED. WATER TO BE PROVIDED BY CENTRAL BASIN MUNICIPAL WATER DISTRICT PURCHASER: CITY of VERNON BASE ALLOCATION: 2,800 acre-feet (AF) TIER 1 ANNUAL MAXIMUM (90% of Base Allocation): 2,52o AF PURCHASE COMMITMENT (60% of Base Allocation x 5): 8,400 AF TERM: 5 years EFFECTIVE DATE:, January 1, 2008 Definitions of capitalized terms used in this Purchase Agreement are provided in Exhibit 1. COMMITMENTS. Central Basin Municipal Water District (Central Basin) agrees to sell Imported Water to Purchaser up to the Tier 1 Annual Maximum amount at the then current Tier 1 Rate. Imported Water sold to Purchaser in an amount greater than the Tier 1 Annual Maximum shall be sold at the Tier 2 Rate. 2. Purchaser agrees to purchase no less than the Purchase Commitment of Imported Water from Central Basin during the Term. 3. If Purchaser's actual Imported Water purchases during the Term are less than the Purchase Commitment, Purchaser agrees to pay Central Basin the undelivered balance of the Purchase Commitment at the average of the Tier 1 Supply Rate in effect during the Term. Purchaser agrees to pay such amount to Central Basin no later than six months after billing. 4. The rates applicable to Imported Water under this Purchase Agreement could change from time to time as determined by the Central Basin Board of Directors. The rates as of the effective date of this Purchase Agreement are shown in Exhibit 1. AMENDMENTS AND RENEWALS Not later than August 1 of each year during the Term, Purchaser may provide a written request to Central Basin to change the Base Allocation for the following calendar year. The process for making the change is described in Exhibit 2. Central Basin shall determine whether such request, and any similar requests from other purchasers, can be accommodated. Central Basin staff shall notify Purchaser in writing no later than October 31 of that year as to its determination regarding the request. An adjustment to a Purchaser's base allocation will be reflected in an amendment to the Purchase Agreement, to be effective the first day of the calendar year following the request. 2. Not later than August 1, 2012, Purchaser may provide written notice to District of its determination to extend this Purchase Agreement for an additional 5-year period. WATER SERVICE The Metropolitan Water District of Southern California (MWDSC) supplies Imported Water sold by Central Basin under this Purchase Agreement. MWDSC shall use its reasonable best efforts to deliver water when needed by the Purchaser during the Term. There shall be no default by Central Basin under this Purchase Agreement if MWDSC fails to deliver water to the Purchaser. 2. Purchase Agreement does not convey any right or confer any entitlement to Purchaser to receive Imported Water through MWDSC distribution system.. 3. Imported Water delivered to the Purchaser under this Purchase Agreement shall be subject to reduction in accordance with the policies and principles governing the allocation of water by MWDSC to its member agencies. In the event MWDSC Board of Directors determines to reduce, interrupt or suspend deliveries of Imported Water, any outstanding balance of the Purchase Commitment at the end of the Term shall be reduced by the reduction in Imported Water made available to the Purchaser under this Purchase Agreement. MISCELLANEOUS This Purchase Agreement will apply to and bind the successors and assigns of the Purchaser and Central Basin. This Purchase Agreement is executed by the duly authorized officers of the Central Basin Municipal Water District and , to be effective January 1, 2008. CENTRAL BASIN MUNICIPAL WATER DISTRICT Art Aguilar General Manager RETAIL WATER AGENCY SEE ATTACHED SIGNATURE PAGE ON City: Dated: City of Vernon Leonis C. Malburg, Mayor ATTEST: APPROVED AS TO FORM: Manuela Giron, City Clerk Jeff Harrison, City Attorney EXHIBIT 1 Exhibit 1 Imported Water Purchase Agreement DEFINITIONS "Base Allocation" means the Purchaser's share of Central Basin's base amount with MWDSC (defined as the "Initial Base Demand" in Central Basin's purchase order with MWDSC). The Purchaser's Base Allocation is used to calculate both the Tier 1 Annual Maximum (90% of Base Allocation) and the Purchase Commitment (60% of Base Allocation times five). Initially, the Base Allocation is determined as the five-year average of Purchaser's non -interruptible imported water purchases from Central Basin, from fiscal years ending 2001 through 2006, plus a prorated adjustment to account for Central Basin's Initial Base Demand. As described in the Adjustments and Renewals section above, Base Allocation may be increased or decreased if Central Basin can accommodate a Purchaser's . request. "Imported Water" means non interruptible, imported water:supplied by MWDSC and sold by Central Basin to Purchaser. Imported Water does not include Long - Term Seasonal Storage Service and other surplus categories of supplies. "Purchaser" means a customer of Central Basin service area that has entered into a Purchase Agreement with Central Basin. "Purchase Commitment" means the amount of Imported Water that Purchaser agrees to purchase from Central Basin. Purchase Commitment must be at least 60% of the Base Allocation times five. Deliveries of surplus imported water supplies, including but not limited to Long -Term Seasonal Storage Service, will not count towards the Purchase Commitment. "Term" means the term of this Purchase Agreement as specified above. "Tier 1 Annual Maximum" means an amount equal to 90% of the Base Allocation. "Tier 1 Rate" means the price charged by Central Basin for deliveries of Imported Water to Purchaser in an amount'up to the Tier 1 Annual Maximum. The initial Tier 1 Rate is $557 per acre-foot. "Tier 2 Rate" means the price charged by Central Basin for deliveries of Imported Water to Purchaser in an amount greater than the Tier 1 Annual Maximum. The initial Tier 2 Rate is $655 per acre-foot. "Tier 1 Supply Rate" means MWDSC per acre-foot Tier 1 Supply Rate, as determined from time to time by MWDSC Board of Directors.. The initial Tier 1 Supply Rate is $73 per acre-foot. "Tier 2 Supply Rate" means Metropolitan's per acre-foot Tier 2 Supply Rate, as determined from time to time by Metropolitan's Board of Directors. The initial Tier 2 Supply Rate is $171 per acre-foot. EXHIBIT 2 Exhibit 2 Imported Water Purchase. Agreement BASE REALLOCATION PROCESS Background In order to receive a greater amount of Tier 1 water for its customers, Central Basin has committed to purchasing supply from MWDSC. It is Central Basin's goal that the sum of Purchase Commitments of Central Basin's customer agencies must always equal Central Basin's commitment to MWDSC. The Base Allocations and the Reallocation process are intended to maintain a full allocation of Central .Basin's Tier 1-priced water to all Purchasers (customer agencies that have -entered into Purchase Agreements_ with Central Basin) in an objective, manner. The Base Allocation determines the Purchase Commitment (60% of Base Allocation times five) and Tier 1 Annual Maximum (90% of Base Allocation) for the Purchaser. Reallocation Process Outline • Central Basin sends out notices to each Purchaser by May of each year during the term of the agreement advising the Purchaser of the status of their purchases to date and asking if each wishes to make changes to their base allocation. Requests for changes must be received by August 1 of each year. • Central Basin will compare any request(s) for increase in Base Allocation to any request(s) for decrease. Central Basin will accommodate requests to the extent that the total of base allocation increases does not exceed the total of base allocated decreases. If more than one Purchaser requests an increase or decrease, adjustments will be made on pro-rata basis according to each Purchaser's relative share of the total request (see Reallocation Example below). • Central Basin will respond in writing to a Purchaser's request by October 31. The Purchaser could receive less as an adjustment than what was requested. Reallocation Example Initial Base (AF) Request (AF) Relative Share Adjustment (AF) New Base (AF) Purchaser A 3,000 -500 5&8% -382 2,618 Purchaser B 1,700 -350 41.2% -268 1,432 Total of Requests for Decrease = -850 100% -650 Purchaser C 500 +100 15.4% +100 600 Purchaser D 650 +250 38.5% +250 900. Purchaser E 420 +300 46.1 % +300 720 Total of Requests for Increase = +650 100% +660 Total Base I 61270 1 6,270 Central Basin Municipal Water District 2008 PURCHASE AGREEMENT BASE ALLOCATION CUSTOMER AGENCY City of Vernon Step 1 Review your Agency's Current Purchase Agreement with Central Basin Municipal Water District: Base Allocation (AF) 3,350 Tier 1 Maximum - 90% of Base (AF/yr) 3,015 5-Year Purchase Commitment (AF) 10,050 Step 2 Indicate your Agency's intentions below: ❑ Your Agency does not seek an adjustment to their Base Allocation. 0 Your Agency is seeking an adjustment to their Base Allocation with Central Basin Municipal Water District by inserting your new amounts in column 1" & "3" below: Base Allocation (AF) Tier 1 Maximum (AF) (90% of Base Allocation) [21 [11+[2)=[31 Amount Requested +/(-) Current Purchase Agreement New Purchase Agreement Terms —550 3,350 2,800 —495 3,015 2,520 0 Your Agency does not seek to enter into a new Purchase Agreement. (If no purchase agreement is desired, then all imported water purchases will be at the Tier 11 rate) Step 3 Please sign and date below: Signature SAMUEL KEVIN WILSON DIRECTOR OF COMMUNITY SERVICES & WATER Title Step 4 Date Please fax this form to David Hill, Water Resource Manager, at [310) 516-1327 or a -mail a scanned copy to daveh@centralbasin.org no later than August 31, 2007. If you have any questions, please contact David Hill at (310) 436-2601. F:\Dave\CB Water Resources\Purchase Agreements\PA Docs 2008-2012\Draft Allocation\2008 PA Allocation Form CITY CLERK'S OFFICE INTEROFFICE MEMORANDUM DATE: December 17, 2007 TO: Kevin Wilson, Director of Community Services & Water FROM: Nelly Giron, City Clerk RE: Resolution No. 9426 - A Resolution of the City Council of the City of Vernon Approving and Authorizing the Execution of a Purchase Agreement For Imported Water to Be Provided By Central Basin Municipal Water District By and Between the City of Vernon and Central Basin Municipal Water District Transmitted herewith is a copy of the fully executed agreement and Resolution No. 9426 referenced above, which was approved by City Council October 2, 2007. Thank you. NG:dr c: Resolution No. 9426 Agreement No. 07-106 PURCHASE AGREEMENT FOR IMPORTED WATER TO BE PROVIDED BY CENTRAL BASIN MUNICIPAL WATER DISTRICT PURCHASER: CITY OF VERNON BASE ALLOCATION: 2,800 acre-feet (AF) TIER 1 ANNUAL MAXIMUM (90% of Base Allocation): 2.52o AF PURCHASE COMMITMENT (60% of Base Allocation x 5): 8,400 AF TERM: 5 years EFFECTIVE DATE:. January 1, 2008 Definitions of capitalized terms used in this Purchase Agreement are provided in Exhibit 1. COMMITMENTS Central Basin Municipal Water District (Central Basin) agrees to sell Imported Water to Purchaser up to the Tier 1 Annual Maximum amount at the then current Tier 1 Rate. Imported Water sold to Purchaser in an amount greater than the Tier 1 Annual Maximum shall be sold at the Tier 2 Rate. 2. Purchaser agrees to purchase no less than the Purchase Commitment of Imported Water from Central Basin during the Term. 3. If Purchaser's actual Imported Water purchases during the Term are less than the Purchase Commitment, Purchaser agrees to pay Central Basin the undelivered balance of the Purchase Commitment at the average of the Tier 1 Supply Rate in effect during the Term. Purchaser agrees to pay such amount to Central Basin no later than six months after billing. 4. The rates applicable to Imported Water under this Purchase Agreement could change from time to time as determined by the Central'Basin Board of Directors. The rates as of the effective date of this Purchase Agreement are shown in Exhibit 1. AMENDMENTS AND RENEWALS Not later than August 1 of each year during the Term, Purchaser may provide a written request to Central Basin to change the Base Allocation for the following calendar year. The process for making the change is described in Exhibit 2. Central Basin shall determine whether such request, and any similar requests from other purchasers, can be accommodated. Central Basin staff shall notify Purchaser in writing no later than October 31 of that year as to its determination regarding the request. An adjustment to a Purchaser's base allocation will be reflected in an amendment to the Purchase Agreement, to be effective the first day of the calendar year following the request. 2. Not later than August 1, 2012, Purchaser may provide written notice to District of its determination to extend this Purchase Agreement for an additional 5-year period. WATER SERVICE The Metropolitan Water District of Southern California (MWDSC) supplies Imported Water sold by Central Basin under this Purchase Agreement. MWDSC shall use its reasonable best efforts to deliver water when needed by the Purchaser during the Term. There shall be no default by Central Basin under this Purchase Agreement if MWDSC fails to deliver water to the Purchaser. 2. Purchase Agreement does not convey any right or confer any entitlement to Purchaser to receive Imported Water through MWDSC distribution system. 3. Imported Water delivered to the Purchaser under this Purchase Agreement shall be subject to reduction in accordance with the policies and principles governing the allocation of water by MWDSC to its member agencies. In the event MWDSC Board of Directors determines to reduce, interrupt or suspend deliveries of Imported Water, any outstanding balance of the Purchase Commitment at the end of the Term shall be reduced by the reduction in Imported Water made available to the Purchaser under this Purchase Agreement. MISCELLANEOUS This Purchase Agreement will apply to and bind the successors and assigns of the Purchaser and Central Basin. This Purchase Agreement is executed by the duly authorized officers of the Central Basin Municipal Water District and , to be effective January 1, 2008. CENTRAL BASIN MUNICIPAL WATER DISTRICT By: .. Art Aguil&anaaer"��' General RETAIL WATER AGENCY SEE ATTACHED SIGNATURE PAGE W max City: Dated: Ola;la i City of Vernon eonis C. Malburg, Mayor A TEST: P/�� Manuela Giron, 'ty C erk R AS TO FORM: J n, City Attorney I y Exhibit 1 Imported Water Purchase Agreement DEFINITIONS "Base Allocation" means the Purchaser's share of Central Basin's base amount with MWDSC (defined as the "Initial Base Demand" in Central Basin's purchase order with MWDSC). The Purchaser's Base Allocation is used to calculate both the Tier 1 Annual Maximum (90% of Base Allocation) and the Purchase Commitment (60% of Base Allocation times five). Initially, the Base Allocation is determined as the five-year average of Purchaser's non -interruptible imported water purchases from Central Basin, from fiscal years ending 2001 through 2006, plus a prorated adjustment to account for Central Basin's Initial Base Demand. As described in the Adjustments and Renewals section above, Base Allocation may be increased or decreased if Central Basin can accommodate a Purchaser's . request. "Imported Water" means non -interruptible, imported water supplied by MWDSC and sold by Central Basin to Purchaser. Imported Water does not include Long - Term Seasonal Storage Service and other surplus categories of supplies. "Purchaser" means a customer of Central Basin service area that has entered into a Purchase Agreement with Central Basin. "Purchase Commitment" means the amount of Imported Water that Purchaser agrees to purchase from Central Basin. Purchase Commitment must be at least 60% of the Base Allocation times five. Deliveries of surplus imported water supplies, including but not limited to Long -Term Seasonal Storage Service, will not count towards the Purchase Commitment. "Term" means the term of this Purchase Agreement as specified above. "Tier 1 Annual Maximum" means an amount equal to 90% of the Base Allocation. "Tier 1 Rate" means the price charged by Central Basin for deliveries of Imported Water to Purchaser in an amount up to the Tier 1 Annual Maximum. The initial Tier 1 Rate is $557 per acre-foot. "Tier 2 Rate" means the price charged by Central Basin for deliveries of Imported Water to Purchaser in an amount greater than the Tier 1 Annual Maximum. The initial Tier 2 Rate is $655 per acre-foot. "Tier 1 Supply Rate" means MWDSC per acre-foot Tier 1 Supply Rate, as determined from time to time by MWDSC Board of Directors. The initial Tier 1 Supply Rate is $73 per acre-foot. "Tier 2 Supply Rate" means Metropolitan's per acre-foot Tier 2 Supply Rate, as determined from time to time by Metropolitan's Board of Directors. The initial Tier 2 Supply Rate is $171 per acre-foot. Exhibit 2 Imported Water Purchase Agreement BASE REALLOCATION PROCESS Background In order to receive a greater amount of Tier 1 water for its customers, Central Basin has committed to purchasing supply from MWDSC. It is Central Basin's goal that the sum of Purchase Commitments of Central Basin's customer agencies must always equal Central Basin's commitment to MWDSC. The Base Allocations and the Reallocation process are intended to maintain a full allocation of Central Basin's Tier 1-priced water to all Purchasers (customer agencies that have entered into Purchase Agreements with Central Basin) in an objective manner. The Base Allocation determines the Purchase Commitment (60% of Base Allocation times five) and Tier 1 Annual Maximum (90% of Base Allocation) for the Purchaser. Reallocation Process Outline • Central Basin sends out notices to each Purchaser by May of each year during the term of the agreement advising the Purchaser of the status of their purchases to date and asking if each wishes to make changes to their base allocation. Requests for changes must be received by August 1 of each year. Central Basin will compare any request(s) for increase in Base Allocation to any request(s) for decrease. Central Basin will accommodate requests to the extent that the total of base allocation increases does not exceed the total of base allocated decreases. If more than one Purchaser requests an increase or decrease, adjustments will be made on pro-rata basis according to each Purchaser's relative share of the total request (see Reallocation Example below). • Central Basin will respond in writing to a Purchaser's request by October 31. The Purchaser could receive less as an adjustment than what was requested. Reallocation Example Initial Base (AF) Request (AF) Relative Share Adjustment (AF) New Base (AF) Purchaser A 3,000 -500 58.8% -382 2,618 Purchaser B 1,700 -350 41.2% -268 1,432 Total of Requests for Decrease = -850 100% -650 Purchaser C 500 +100 15.4% +100 600 Purchaser D 650 +250 38.5% +250 900 Purchaser E 420 +300 46.1 % +300 720 Total of Requests for Increase = +650 100% +650 Total Base 1 6,270 1 6,270